Deutsche Bank cuts Accenture stock price target to $290

On Friday, Deutsche Bank (ETR:DBKGn) analyst Bryan Keane adjusted the price target for Accenture plc (NYSE:ACN) shares, bringing it down to $290 from the previous $365, while maintaining a Hold rating on the stock. According to InvestingPro data, analyst targets for Accenture currently range from $290 to $455, with the company’s $188.5 billion market cap making it a prominent player in the IT Services industry. Keane’s analysis followed Accenture’s report of approximately $16.7 billion in revenue for 2025, which represents a year-over-year increase of around 5.4%, or 8.5% on a constant currency basis. The company’s adjusted earnings per share (EPS) of $2.82 were slightly below Deutsche Bank’s estimates but aligned with the consensus. InvestingPro data shows the company maintaining strong fundamentals with a 32.2% gross profit margin and a healthy return on equity of 27%.

Accenture’s gross and operating margins did not meet expectations, as highlighted by Keane. However, the company did raise the lower end of its constant currency revenue guidance to approximately 5-7%, compared to the previous forecast of 4-7%. This adjustment was anticipated in Deutsche Bank’s preview. Despite the revision, Accenture mentioned a negative impact on its Federal Services business sales and revenue stemming from the new administration’s emphasis on government efficiency. The company also pointed out ’increasing uncertainty’ in global macroeconomic conditions, although it has not experienced any significant slowdown to date.

While the results and guidance were considered solid, Keane noted that Accenture faced a difficult balance due to the dual pressures of DOGE/macro risks and slightly improving fundamentals. Nevertheless, the company managed to guide conservatively for the fourth quarter of 2025, implying a deceleration in organic revenue growth. InvestingPro analysis indicates the stock is currently undervalued, despite trading at a relatively high PEG ratio of 2.54. Subscribers can access 12 additional ProTips and comprehensive financial metrics through the Pro Research Report.

Keane has maintained the FY25 EPS estimate at $12.79 while reducing the FY26 and FY27 EPS estimates by $0.65 and $1.00, respectively, to $13.45 and $14.74. The adjustment in Accenture’s price target to $290 is attributed to lower peer group valuations and heightened levels of uncertainty, according to Keane’s closing remarks.

In other recent news, Accenture plc reported its financial results for the second quarter of fiscal year 2025, surpassing analyst expectations with earnings per share of $2.82 and revenue of $16.7 billion, exceeding the anticipated $16.63 billion. Despite these positive results, the company faces challenges with federal contracts, attributed to the U.S. government’s focus on reducing federal spending, which has led to a slowdown in its federal services unit. This unit accounts for about 8% of Accenture’s total revenue, impacting sales and revenue as new procurement actions have decelerated. In response to these challenges, analysts from TD Cowen and Stifel have adjusted their outlooks for Accenture, cutting their price targets to $365 and $355, respectively, while maintaining a Buy rating. Stifel noted that Accenture’s second-quarter results showed a modest revenue increase of 4.5% year-over-year on an organic constant currency basis, with earnings per share aligning with expectations. Accenture has also raised the lower end of its revenue guidance for fiscal year 2025, expecting 2-4% growth, although the upper-end margin guidance has been slightly decreased. The company’s focus on digital transformation and artificial intelligence has seen strong performance, with new GenAI bookings reaching $1.4 billion in the second quarter. Despite the near-term uncertainties, Accenture’s strategic investments in AI and digital transformation are seen as key factors in navigating the current market environment.

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